Order List of 1-25-2008 [Part 2]

This is the second part of my posting about today’s order list, in which the Texas Supreme Court decided eight cases and set three others for argument.

This post covers the four decisions handed down in cases from the Court’s oral argument calendar — which include a decision in the mandamus action involving the Texas City refinery explosion at a British Petroleum facility now pending in Galveston, as well as a more typical array of decisions about how to preserve error for appeal and whether to construe statutes “literally” or “naturally.”

A previous post covered today’s four per curiam decisions. A later post will cover the three new cases set for argument.

This fraud case involved questions of both Virginia law (about liability) and Texas law (about damages). On the liability question, the Court read Virginia law as drawing a distinction between false “statements of fact” that might be actionable by fraud claims and mere “statements of opinion” which would not.

[W]e reject arguments that Virginia law would uniformly treat all reserve estimates â€” regardless of the circumstances â€” as mere opinions (Arkomaâ€™s view) or as statements of fact (the partnershipsâ€™). Instead, viewing all the surrounding circumstances in a light favorable to the verdict, and keeping in mind Virginiaâ€™s clear and convincing evidence standard, we hold that Arkomaâ€™s reserve estimates in the mature Wilburton field were actionable as statements of fact,while those in the South Panola field were nonactionable statements of opinion. We affirm the juryâ€™s fraud verdict as to the 1988-B and Lazare partnerships, and reverse the remainder.

On the damages question, the Texas Supreme Court first confronted the question of what is sufficient to preserve an no-evidence objection. Here, Arkoma did not object at trial and its post-trial motion asserted merely that “there is no evidence … to support the jury’s answers to each part of Question 4” (the damages question).

The Court held that, in these circumstances, this was sufficient treatment in a post-trial motion. It explained:

Generally, a no-evidence objection directed to a single jury issue is sufficient to preserve error without further detail. Thus, as Justice Calvert wrote for this Court 50 years ago, while a single such objection to all 79 jury answers is too general, the same objection addressed to each individual issue is adequate. Several commentators suggest this is precisely what careful practitioners should do. …

Of course, stock objections may not always preserve error. If a single jury question involves many issues, it is possible that a general objection may not tell the trial court where to start. But post-trial objections will rarely be as detailed as an appellate brief because time is short, the record may not be ready, and the trial court is already familiar with the case. In that context, an objection is not necessarily inadequate because it does not specify every reason the evidence was insufficient.

Somewhat interestingly (at least to an appellate lawyer), the Court did not complete its analysis of the other preservation question — whether an objection to the adequacy of this expert testimony at trial was necessary. Instead, the Court noted the issue and then jumped ahead to the substantive question. The Court held that this challenged expert testimony was sufficient. For that reason, the Court explained, it was unnecessary to decide the threshold procedural question of whether the objection had been preserved at trial. ((In that light, the Court does not explain why it was nonetheless necessary to decide the first preservation question, the one about post-trial motions. The answer may simply be that the Court saw a clear answer to the first question and no clear answer to the second. Given the amount of time that this case was pending, it seems possible that this argumentative move in the Court’s opinion was designed to step around an issue on which the Justices may have disagreed that might have fragmented the opinion or further delayed its issuance.))

The Texas Supreme Court affirmed the fraud judgment for two of the eight partnerships involved in this case. With regard to the other six, it reversed and rendered a take-nothing judgment.

City of Rockwall v. Hughes, No. 05-0126. Divided 5-4, the Texas Supreme Court held that the Legislature did not grant permission for a landowner to arbitrate against a city when its land was denied inclusion in a certain kind of city annexation plan. The majority opinion and dissent differed about what the Legislature intended to accomplish. Justice Johnson writing for the majority, seizing the rhetorical ground of giving literal construction to the statute, explained that:

We decline to read additional language into the statute as the Estate urges us to do. We go no further than the unambiguous language of the statute to interpret it. Section 43.052(i) does not create a substantive private right for a landowner to compel arbitration if a municipality takes action on the landownerâ€™s petition by denying it, as the City did. Accordingly, the Estate lacks standing to pursue the suit it filed.

The dissent, through Justice Willett, argued that:

The Court espouses sound principles of statutory construction but unsoundly applies them. Basically, it takes literalism too literally. Read naturally, section 43.052(i) means this: landowners who request inclusion of their land in a cityâ€™s annexation plan may arbitrate the cityâ€™s failure to include it.

Choosing between a “literal” and a “natural” reading of a statute is of course a somewhat slippery question of legislative intent, and one on which it is easy for courts to disagree (as this Court did by dividing 5-4). The dissent explains its reasoning in favoring the “natural” reading in this case by suggesting that any other reading is absurd in this context:

Given the power of context to transform the meaning of language, courts should resist rulings anchored in hyper-technical readings of isolated words or phrases, or forced readings that are exaggerated or, at the other extreme, constrained.

This â€œcontext mattersâ€ maximâ€”a cardinal rule not only of statutory construction but â€œof language itselfâ€â€”is rooted in common sense, Texas statutory law, and caselaw from both this Court and the United States Supreme Court. (( For this last point, the dissent quotes a blistering dissent by Justice Scalia. The dissent could as well have cited Justice Breyer’s recent “butter in the refrigerator” dissent in Ali v. Federal Bureau of Prisons, in which he explained why he thought that statute’s use of the word “any” must be read in context: “When I call out to my wife, ‘There isnâ€™t any butter,’ I do not mean, ‘There isnâ€™t any butter in town.’ The context makes clear to her that I am talking about the contents of our refrigerator. That is to say, it is context, not a dictionary, that sets the boundaries of time, place, and circumstance within which words such as ‘any’ will apply.”))

In this condemnation proceeding, we must decide whether property descriptions in a series of quitclaim deeds transferred through constableâ€™s sales were insufficient as a matter of law to identify the lands to be conveyed, and whether the trial court, a county civil court at law in Harris County, had jurisdiction to decide the issue. We hold that, pursuant to section 25.1032(c)(1) of the Texas Government Code, the county court had jurisdiction to decide issues of title arising out of the condemnation suit irrespective of the amount in controversy. We further hold that the property descriptionsâ€™ adequacy to permit location of the land conveyed cannot be conclusively determined on this record, and therefore summary judgment voiding the conveyances was improper. Accordingly, we reverse the court of appealsâ€™ judgment and remand the case to the trial court for further proceedings consistent with this opinion.

Justice Willett’s concurrence states his view that legislative history is an improper basis for statutory construction, even in cases where it is consonant with the statute’s text.

It is interesting to read this concurrence in light of Justice Willett’s dissent today in City of Rockwall, in which he takes the majority to task for applying a statute too literally. There is a subtle difference between citing legislative history (as the majority does in this case) and looking beyond the statute’s text to its “context” (as the dissent advocates in City of Rockwall). Exploring that difference goes far beyond the reach of this simple case summary.

In re BP Products North America, Inc., No. 07â€‘0119. This is an “apex deposition” case arising out of the Texas City refinery explosion. The Court issued mandamus relief against a trial court that had ordered the deposition of a key corporate executive (John Browne, then the CEO of BP, p.l.c., the parent company of BP Products North America). That trial court order had expressly overridden the parties’ agreement about the circumstances under which the plaintiff would be permitted to depose a particular corporate officer. Justice Gaultney, sitting by designation, delivered the opinion of the Court. ((The order list indicates that Justice Gaultney was “sitting by commission pursuant to Section 22.005 of the Texas Government Code” and that Justice O’Neill was not sitting on this case. He serves on the Ninth Court of Appeals in Beaumont. His official biography is here.))

The parties agreed under Rule 11 and Rule 191.1 to a procedure that would permit the plaintiffs to depose a different corporate officer and — if that deposition supported the view that the CEO had unique information — a very limited, one-hour telephonic deposition would be permitted.

Sometime later, the trial court set aside that agreement and instead ordered an “apex deposition” to take place under the normal common-law standards governing apex depositions. The Texas Supreme Court rejected the view that the common-law principles would apply when the parties had agreed to a different standard and had relied on that agreement in conducting discovery:

The apex doctrine, however, does not control the outcome in this case. The discovery agreement displaced the common law standard with the partiesâ€™ own standard. As BP Products explained in its brief: â€œIf new evidence was developed during Manzoniâ€™s deposition showing that Browne had unique and superior knowledge of relevant facts, then Browne would be presented at a limited deposition. . . . Both parties retained the right to appeal the trial courtâ€™s ruling on the new evidence issue.â€

The Texas Supreme Court walked through and rejected the possible grounds that might have supported setting aside the parties’ discovery agreement, concluding that there was no support for the “grounds of misrepresentation, estoppel, and changed circumstances.” The Court found no evidentiary basis for a misrepresentation involving the discovery agreement. It rejected the estoppel argument. And it rejected the view that the deponent’s public statements about the case were “the kind of changed circumstance that might amount to ‘good cause’ for setting aside the discovery agreement.”

The Court also rejected the argument that striking the discovery agreement could have been construed as a sanctions order against BP for trying to taint the jury pool. The Court’s analysis focused on the procedural trappings of this particular trial court hearing, which did not appear to be a sanctions hearing; the trial court did not give notice of a sanctions hearing or expressly invoke any sanctions power.